Accor completes FRHI takeover

Accor Hotels Group has completed the cash-and-share purchase of FRHI Hotels & Resorts following shareholders’ approval on Tuesday.

The $2.9bn deal sees Accor pay $840m (€768m) in cash, issue 46.7 million shares and provide Qatar Investment Authority (QIA) and Kingdom Holding Company (KHC) respective stakes of 10.4 per cent and 5.8 per cent in Accor’s share capital.

Read: AccorHotels announces $2.9bn acquisition of Fairmont, Raffles and Swissôtel brands

With Raffles, Fairmont and Swissôtel brands joining the Accor stable, the French operating giant now has a greater footprint in the luxury segment and FRHI benefits from Accor’s global distribution platform. 

Ali Bouzarif and Aziz Aluthman Fakhroo from QIA and Sarmad Zok from KHC join AccorHotels’ board of directors, providing the opportunity to target further acquisitions.

But much like the Marriott-Starwood takeover, which itself is in the process of closing (that deal though is four times larger, valued at $12.2bn), it remains to be seen whether there will be further consolidation in the newly enlarged group.

Accor says it has identified €65m in “revenue and cost synergies”, most likely with the over-lapping Fairmont, Pullman and Sofitel, which itself has Luxury Hotels, Sofitel Legend, So Sofitel and Mgallery by Sofitel sub-brands. The integration includes FRHI’s customer base with three million loyalty members, three-quarters of which are in North America.

The tie-ups come at a time when hospitality competition is intensifying, not only among established brands but online travel agencies and Airbnb. To this end, Accor bought online home rental site OneFineStay for €148m in April.

Accor will be hosting a briefing tomorrow in Dubai to provide more details.

The hotelier previously indicated it would more than double its Middle East footprint following the deal.

Read: AccorHotels plans to ‘more than double’ Middle East footprint following FRHI acquisition